Price of Money Part 3 - What Angel Investing & 1 Night Stands Have In Common
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...always issues with young businesses. And when I began angel investing again this year I made sure that if a company wanted my money then they could at least sit through one of my School for Startups events. I reasoned that they would know my philosophy of starting a company and they would get an eight hour dose of what I am like. If they weren’t tired of my voice at the end of eight hours then maybe they wouldn’t be tired after eight months.
Of course, everything went differently than that. The few companies I was interested...
...in I began to help right away. And for most of them I’ve continued to help them for months. In the process though we have gotten to know each other. And inevitably the amount of capital they have needed has changed and how it was going to be deployed has changed as well.
I of course have benefited enormously. I have gotten to know them in a way that no amount of due diligence would ever reveal and it has helped me decide whether I really wanted to invest, and I have a much more finely tuned sense of whether the investment is likely to deliver a return.
In short, it is in my self-interest as an angel investor to mentor a start-up before I invest, sometimes for months. The startup also values me far more at the end of the process than at the beginning. When I tell them at the beginning that my real value is in the advice I can give, in helping them avoid making silly mistakes, and in my list of contacts they always pay lip service to me but I can tell that they think that its my money that will really make the difference.
Six months on their... continued on page three >